Business Growth (Quizlet Revision Activity)

Here is a revision Quizlet activity on key terms linked to business growth. This is for Year 13 Business Economics.

Key Terms to Revise

Agency problem Possible conflicts of interest between shareholders (principal) and management (agent) of a firm

Backward Vertical Integration: Acquiring a business that operates earlier in the supply chain

Conglomerate integration: Merger between firms in unrelated business, e.g., between a car manufacturer and a food processing firm

Consolidation: A reduction in the number of competitors in a market and increased market share held by remaining firms.

Corporate governance: Practices, principles and values that guide a firm and its activities

Corporate strategy: A company's aims in general, and the way it hopes to achieve them

De-merger: Splitting up a company and selling off some assets - often to avoid diseconomies of scale

Forward vertical integration: Acquiring a business further up in the supply chain closer to final consumers

Horizontal integration: When companies merge from the same industry at the same stage of production

Incumbent firms: Established firms in a market who may be able to use barriers to entry for example through economies of scale.

Innocent entry barriers: Arise when established firms have lower unit costs than potential rival firms

Joint Venture: Agreement between two companies to cooperate on a project that serves their mutual commercial interests

Lateral integration: Companies join together that produce similar but related products.

Multinational: A company with subsidiaries or manufacturing bases in several countries.

Organic growth: Business expansion by increasing the scale of a firm's own operations

Shareholder return: Total return for equity holders (comprising dividends + increases in business value)